The Future of the Italian Market: Q&A with Alexander Martin, CEO, SKS365
As we see Italy recover from the enforced sporting suspension, online casino popularity has risen by exponential amounts.
But how is the shift in player habits impacting the future of the Italian market?
We caught up with Alexander Martin, CEO, SKS365 to hear his thoughts on the future and how leadership strategies have evolved.
What are some of the biggest challenges Italian operators are facing at the moment and how will this impact you in the future?
“As both an online and landbased operator, with 1000 shops in Italy, we definitely experienced good luck, as one of the big challenges before Corona was the marketing and sponsorship ban.
All forms of advertising in the Italian market are not possible anymore, so you can’t promote your brand in any form since middle of last year. This represents a massive challenge for the market.
If you have an online only license in the Italian market, it’s incredibly difficult to generate awareness of the brand. Luckily SKS365 has the retail channel to acquire online customers.
Another key challenge is the new turnover tax brought in by the Italian Government. This gets increased when anything negative happens to the country, and the gambling industry is often the first to pay the price as taxes get raised very quickly.
An additional 0.5% on taxes has been added on turn over, for both sports betting and virtual.
Overall Italy is one of the countries with the highest taxes for the entire gambling industry. For retail it is 20%, for virtual it’s 22% and for online, the tax rate is 24%.”
Do you see the advertising ban changing?
“I have to say it’s a little unforeseeable. An efficient environment would be one where licensed operators are allowed to promote and market their brand, as it cleans up the entire operation.
There are some illegal operators that don’t care about rules and regulations. They are the ones who do the marketing which licensed operators cannot. From a player protection and regulator perspective, the ban is certainly not the best way to operate.
I do believe proper regulation in a country is good to have, and Italy is one of the countries with the longest standing regulations. They were also one of the first countries to regulate the gambling market.
It’s very important to have good collaboration between regulators and licensed operators as licensing can be a huge barrier for entry. To operate legally it’s a big burden financially, not only from the taxes, but from the technical and financial requirements.”
How is the landscape shaping your products?
“The core business for sports betting operators is football, which came to a big halt. So, during the Corona situation, we quickly broadened our sports betting portfolio when major leagues ended or stopped.
Football did, however, continue in Belarus and central Africa, and we did see people continuing to play. Nevertheless, we actively broadened our offering.
For example, we introduced table tennis into the Italian market for the first time, which was a huge success for us. We also improved our virtual sports betting offerings.
If there wasn’t anything happening sports wise, between real people, virtual sports were something that people were interested in. The same goes for esports. Even though esports had already been in our portfolio for a long period of time, we still broadly enriched it, with Fifa and NBA2K amongst various others.
These changes were very important for the future of our business as no one really knows if there’s going to be another lockdown. The lockdowns can happen regionally, and we just don’t know what the sports calendar will look like.
From a traditional sports book operation, you could be forecasting nearly 12 months in advance. Nowadays, especially over the last month, you couldn’t even do that for the next day.
We also introduced some table games which were actually getting recorded in live casinos, so the players could feel like they we were in a real environment. This offers a different and very engaging atmosphere for the players.”
Will the converted sportsbook players stay engaged with the new products, or will the players just go back to what they’ve always done?
“I believe the players will do what they always have. But I think there will also be a percentage of the customer base who wanted to try something new over the last month, and we’ll see them continue to play the alternative products.
For example, we saw a poker boom over the Corona period because everybody had some time, and the players were looking for games they could play for longer periods.
Even though lockdown has finished in principal, the boom is still going on. Some of these players could be have played for the first time, and some could have been part of the poker boom 10 years ago.
The interactive side has also been an important factor, and the ability to chat with others has certainly helped the poker revival over the lockdown period.”
SKS365 is a large employer in Italy, how has the pandemic shaped the leadership strategy for the business?
“We’ve always seen our people as very important, and a key decision for us was to keep our entire workforce.
With all of our people working from home, we decided to offer them the chance to develop further, so, we put a lot of effort into learning and development. The HR team undertook this massive communication activity with all of our 7,000 agents, and it’s still going on.
The learning platform we used offered not only professional development, but personal experience development too. Our workforce was highly appreciative, and they continue to take advantage of the opportunity to grow further.
We also took the time to develop our retail business further. So as lockdown eases, we are reopening our shops with a full new retail system solution. The open cashier system we now have in place is something the Italian market hasn’t seen before.
When there’s big uncertainty and you’re going into unclear waters, the entire management team need to be visible and transparent in their handling of business change. Management should be clear with their communication about the future of the business.
Everyone has more questions than they ever did before, so you have to give them some answers.
In the operational side of the company, the number one priority for me is safety and compliance. And for me, it’s the safety of our own employees or agents or associated employees that is the most important thing.
This period of time almost served as an innovation booster, and we will see a lot of lasting positive changes.”
Editor’s note: Whilst Covid-19 has undoubtedly brought uncertainty to the market, there’s a portion of businesses who are rising to the challenge and evolving at a rapid pace.
Whether it’s broadening the portfolio, adopting fresh marketing tactics, or simply recentring around its human capital; the pandemic is driving businesses to emerge stronger and more robust than ever before.
